Wednesday, April 08, 2009


by Dick Mac

I am not an economist, but I participate in the economy, and have done so since I purchased my first piece of candy with my own money in 1963, that's 46 years.

I do not understand or know the underlying theories about economic development or maintenance, but I know a bad idea when I see one.

I knew, during the 1980 presidential campaigns, that the talk of deregulation was dangerous and that deregulation was a bad idea.

How did I know this? Well, most regulation was put into place after the Great Depression, and the rules were instituted to prevent another depression, another stock market crash, from happening. That regulation was very effective and we had nearly fifty years of prosperity that had never been known by any civilization in the history of mankind.

During that entire half-century of prosperity, the avaricious ilk that created the 1929 stock market crash never stopped trying to undermine our national security by repealing regulation. It took them over 40 years to find Ronald Reagan as their poster boy, and he delivered to American working people two terms of presidential policies that began the complete erosion of workers' security, and set us on a course that brought us to today: another depression.

Bush I, Clinton, and Bush II all signed-on to keep the gravy train pulling out of the station on Main Street for its permanent berthing on Wall Street. Oddly, only Bush I ever spoke out, calling Reaganomics "voodoo economics" and actually raising taxes (after famously declaring "no new taxes") in an attempt to save his country from total financial ruin.

It's odd for me to say that recent history shows the only fiscally responsible President in almost 30 years was Bush I. He actually knew that supply-side theory was bad for America and he was not re-elected because of it.

Undoubtedly, Bush II has done the most damage to the United States in every arena from economics to diplomacy. He left this nation in a shambles. One of his deregulation moves was to rescind the "uptick rule" in 2007. The uptick rule was in place to control short-selling by allowing it only at a price higher than the prevailing national bid.

As I've said, I am not an economist so I can't actually describe why the uptick rule is a good thing, but something tells me that if you're buying something because you think it's going to lose value, and it has already lost value, there isn't much risk to the dealer or value for the citizenry. The uptick requirement is probably good, because it was in place for decades until 2007, and we didn't have depression since its inception.

Of course, the uptick rule alone will not save our economy, but along with the reinstitution of other sensible regulation, we can probably get back to enjoying a robust economy like that we had between the presidencies of FDR and Reagan.

So, when the SEC meets this week to consider reinstatement of the uptick rule, we can only hope they choose the best interest of humanity over the best interests of a few bankers.

Return of US short-selling 'uptick-rule' edges closer

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